In effect, the two companies are funding an MBO - the management will have 20 per cent of the enlarged business, and Chrysalis and 365 will have 40 per cent each. But they are to take no operational role in the new entity and both are drawing a line on future funding.

Chrysalis has a successful radio business, and 365 Corporation has a successful telephone operation. But neither has succeeded in turning extensive investments in the Internet into a profit. With this deal, their ambitions as online players have ceased.

Chrysalis is contributing £ 1.3m to working capital to the sports combo and 365 Corp is shelling out £ 700k. This is enough to support the business for 18 months. The companies will also each make available up to £250k for future acquisitions.

So what's the future of the 365/Rivals.net sports combo? Well, it kicks off with pro forma annual revenues of "between £4m and £5m, with costs of about £4m," according to the briefing granted to the FT today.

And there are three million users a month, a useful platform for banner advertising (although it is questionable just how remunerative independent fan-based sites which comprise much of Rivals.net can prove). Second, this is a useful platform for gambling - potentially the biggest money spinner of all for sports sites.

Finally, it means that the combo will be predator rather than prey in this current round of consolidation. In May, Forrester Research predicted the survival of just three online sports majors in the UK - the BBC, Sky and Sports.com.

Sports.com last week bought the German ops of Sportal for an undisclosed sum. This company secured $13m in its most recent round of funding, and investors include IMG, the world's most important sports management/rights agency.

Gavin Chittick, COO for Sports.com, told the FT today: "Our attitude has been to be the last man standing at the end."

Sky is more about potential than what it is doing online today. The company has huge sports subscription TV interests, it promotional thump through the parent company's News International newspaper interests; and it is rich.

It is perhaps fortunate for 365/Rivals that the BBC, the most important British player in the online sports arena is a commerce-free zone. ®